TITLE: We Found That Landlords Could Be Using Algorithms to Fix Rent Prices. Now Lawmakers Want to Make the Practice Illegal.
https://www.propublica.org/article/senators-introduce-legislation-stop-landlords-algorithm-price-fixing
EXCERPT: The proposed law follows a ProPublica investigation that found software sold by Texas-based RealPage was collecting proprietary data from landlords and feeding it into an algorithm that recommended what rents they should charge. Legal experts said the arrangement could help landlords engage in cartel-like behavior if they used it to coordinate pricing.
The software is widely used by competing landlords. In Seattle, for example, ProPublica found that 10 property managers oversaw 70% of all multifamily apartments in one neighborhood — and every single one used pricing software sold by RealPage.
“Setting prices with an algorithm is no different from doing it over cigars and whiskey in a private club,” said Sen. Ron Wyden, D-Ore., one of the leading sponsors of the new bill. “Although it’s my view that these cartels are already violating existing antitrust laws, I want the law to be painfully clear that algorithmic price fixing of rents is a crime.”
Lawyers for RealPage and other defendants have called the idea that the company and landlords formed a conspiracy “implausible.” In legal filings, they pointed to a company FAQ that said the recommendations from the software “may be followed, modified, or ignored by an apartment provider.”
After ProPublica’s investigation ran in 2022, tenants filed dozens of federal lawsuits against scores of the nation’s biggest landlords alleging violations of antitrust law. Congressional lawmakers called for an investigation by the U.S. Department of Justice, which later backed the tenants’ lawsuits. At a Senate hearing in October 2023, a former federal prosecutor encouraged lawmakers to consider antitrust enforcement reforms to close gaps that have occurred as technology has evolved.
The bill set to be proposed Tuesday, sponsored by Democrats including Wyden, Peter Welch of Vermont and Amy Klobuchar of Minnesota, would make it illegal for property owners to contract with companies that coordinate rent prices and housing supply information. The legislation would also bar two or more rental owners from coordinating on such information. Mergers between two information-coordinating companies that reduced competition would also be banned.
A statement released by Wyden’s office called out RealPage and a second property management technology company, Yardi, by name.
“Companies like RealPage and Yardi brand themselves as providing ‘property management software,’ but in reality they facilitate collusion by landlords to charge above-market rent,” the statement said. “This is exactly how a price-fixing cartel operates, but instead of using code names and secret meetings, the price-fixing is offered as a service.”
Algorithms are helping housing providers collude in the midst of “a crisis of housing availability and affordability” in which rents have risen by double digits since 2020 and homelessness is up, according to the statement. It said the proposed law — dubbed the Preventing the Algorithmic Facilitation of Rental Housing Cartels Act — would strengthen future legal cases, as well as prevent mergers that could push rents higher.
TITLE: Half of US tenants can’t afford to pay their rent. Here’s what’s ahead
https://www.cnn.com/2024/01/30/economy/rent-prices-dropping-2024-apartments/index.html
EXCERPT: Half of renters in the United States have found themselves paying more than they can afford, following years of surging rents. But an increase in the construction of multiple-unit buildings has boosted the supply of apartments, which is slowly beginning to rein in runaway rents.
Nationally, rents declined annually in December for the eighth straight month, according to Realtor.com’s monthly report. The median asking rent was $1,713, which was down $4 from November and down $63 from the July 2022 peak.
However, median rent is still $309 higher than the same time in 2019, before the pandemic. That’s a 22% increase.
And people have been feeling it. In some places, rents aren’t dropping at all. Rent is just increasing at a slower pace.
Still, even if rents aren’t dropping like a rock, they aren’t expected to be skyrocketing in the same way this year.
This may come as some relief to the 22.4 million households who, according to Harvard University’s Joint Center for Housing Studies, pay more than a third of their income in rent.
Paying anything above the standard 30% threshold is commonly considered a cost burden.
What’s more, 12 million of those renters are severely cost burdened, which means they are spending more than half their income on housing.
The report reveals several disturbing records, including the record-high number of renters in housing they cannot afford and a record-high number of people who are homeless, said Chris Herbert, managing director of the Harvard Joint Center for Housing Studies.
In addition, the report found that evictions are rising as pandemic protections have expired and a record-high number of income-eligible renters can’t get assistance as rental support falls short.
TITLE: Luxury Home Prices Hit All-Time High As Record Share of High-End Buyers Pay Cash
https://www.redfin.com/news/luxury-housing-market-q4-2023/
EXCERPT: Prices of luxury homes rose at twice the pace of non-luxury homes at the end of 2023, partly because elevated mortgage rates are irrelevant to many affluent buyers. Low inventory is another factor driving prices up: Even though luxury new listings rose, overall supply is still below pre-pandemic norms.
The typical U.S. luxury home sold for a record $1.17 million in the fourth quarter, up 8.8% from a year earlier. Prices of non luxury homes increased at half the pace, rising 4.6% year over year to a record $340,000.
This is according to an analysis that divided all U.S. residential properties into tiers based on Redfin Estimates of the homes’ market values as of January 2024. This report defines luxury homes as those estimated to be in the top 5% of their respective metro area based on market value, and non luxury homes as those estimated to be in the 35th-65th percentile based on market value.
The outsized increase in luxury prices, along with a jump in luxury new listings and improving sales, signal that affluent homebuyers and sellers are becoming more active.
A record-high share of all-cash luxury home purchases drove the relative strength of the high-end housing market: Nearly half (46.5%) of the fourth quarter’s luxury purchases were made in cash, up from 40% a year earlier.
Luxury prices are rising at twice the rate of non-luxury prices largely because so many affluent buyers are able to buy homes in cash, rendering today’s elevated mortgage rates irrelevant. High mortgage rates have a more chilling effect on the rest of the market, upping interest payments and keeping price increases modest.
“A lot of luxury buyers are coming in with cash, snapping up expensive homes,” said Heather Mahmood-Corley, a Redfin Premier agent in Phoenix. “High-end homes are selling fast, especially in desirable areas like luxurious Scottsdale, or Tempe, which West Coast transplants love because it’s centrally located. One client recently bought a house in Tempe, flipped it, and it sold for $1.4 million in two days.”
Low inventory is another factor pushing luxury prices up. Even though the supply of luxury homes surged from a year earlier, it’s still well below pre-pandemic levels, leading to competition from well-heeled buyers over a limited number of homes.
New listings of luxury homes jumped 19.7% year over year in the fourth quarter, the biggest increase in over two years. The increase brings the number of U.S. new luxury listings to just under 53,000, comparable to fourth-quarter levels in 2018 and 2019, just before the pandemic started.
By comparison, new listings of non luxury homes fell roughly 3% from a year earlier–though that’s the smallest decline in a year and a half.
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